Living off the Land

There can be dramatic and sometimes commercially inhibiting fiscal effects arising out of the decision to hold and to occupy agricultural land in a particular way. In a case where the landowners do not want to farm the land themselves one option could be the grant of a tenancy (whether to a member of the land-owning family or to a complete outsider) such that the return to the landowner will be rental income rather than a share of farming profits (or losses).
The agricultural holdings legislation in 1995 creating the farm business tenancy has over the last five years provided a specific incentive to the creation of new tenancies i.e. so as not fiscally to disadvantage the landowner.
In the days before the present favourable régime of capital taxation tenancies were sometimes created in favour of a family farming company with a...